Professional Documents
Culture Documents
Legal consequences from point of perfection are the same in both legal Article 1483. Subject to the provisions of the Statute of Frauds and of
systems: upon perfection of an unconditional contract of sale involving any other applicable statute, a contract of sale may be made in writing,
specific or determinate subject matter, the risk of loss deterioration and or by word of mouth, or partly in writing and partly by word of mouth,
the benefits of fruits and improvements, were fro the account of the or may be inferred from the conduct of the parties.
buyer.
FORM OF SALES
WHO BEARS RISK OF LOSS/ DETERIORATION/ I. Form not important in validity of sale
FRUITS: a. Sale being consensual, may be oral or written, perfected by mere
1. BEFORE PERFECTION consent as to price and subject matter
a. Res perit domino b. If particular form is required under the statute of frauds:
b. Owner is seller so seller bears risk ofloss i. valid and binding between parties but not binding to 3rd persons
2. AT PERFECTION c. Reason: purposes of convenience only and not for validity and
o Res perit domino enforceability; cause of action is granted to sue and compel other
o Contract is merely inefficacious because loss of the subject matter party to execute the document
does not affect the validity of the sale
o Seller cannot anymore comply with obligation so buyer cannot II. When form is important for validity; exception by specific provision
anymore be compelled of law;
3. AFTER PERFECTION BUT BEFORE DELIVERY a. Power to sell a piece of land granted to an agent – otherwise VOID
o Loss – confused state b. Sale of large cattle; must also be registered with Municipal treasurer –
o Paras: BUYER otherwise VOID
o Tolentino: SELLER c. Sale of land by non-Christian if not approved by Governor– VOID
o Deterioration and fruits – Buyer bears loss;
4. AFTER DELIVERY III. When form is important for enforceability (STATUTE OF FRAUDS
o Res perit domino Article 1403 (2))
o Delivery extinguishes ownership visa-vis the seller and creates a new a. A sale agreement which by its terms is not to be performed within a
one in favor of the buyer year from the making thereof;
b. An agreement for the sale of goods, chattels or things in action, at a
Article 1481. In the contract of sale of goods by description or by price not less than P500.00; and
sample, the contract may be rescinded if the bulk of the goods c. A sale of real property or of an interest therein.
delivered do not correspond with the description or the sample, and if
the contract be by sample as well as description, it is not sufficient that IV. EXCEPTIONS TO COVERAGE OF STATUTE IN SALES CONTRACTS:
the bulk of goods correspond with the sample if they do not also 1. When there is a note or memorandum in writing and subscribed to by
correspond with the description. party or his agent (contains essential terms of the contract)
The buyer shall have a reasonable opportunity of comparing the bulk 2. When there has been partial performance/execution (seller delivers
with the description or the sample. with intent to transfer title/receives price)
3. When there has been failure to object to presentation of evidence
Sale of Goods By Description- where a seller sells a thing as being of a (oral)
certain kind verbally describing them and the buyer simply relies on the 4. When sales are effected through electronic commerce
seller’s descriptions of the things, not knowing whether the seller’s
representations are true or not. Article 1484. In a contract of sale of personal property the price of
which is payable in installments, the vendor may exercise any of the
Sale by Sample- Where the seller warrants that the bulk of goods being following remedies:
sold correspond with the sample or samples exhibited not only in kind (1)Exact fulfillment of the obligation, should the vendee fail to pay;
but also in quality and character. (2) Cancel the sale, should the vendee's failure to pay cover two or
more installments;
Sale by Description and Sample- Where the seller has to satisfy the (3) Foreclose the chattel mortgage on the thing sold, if one has been
requirements in sale by description and sample. There are two-fold constituted, should the vendee's failure to pay cover two or more
warranty here: installments. In this case, he shall have no further action against the
(a) the goods purchased matched with the description and purchaser to recover any unpaid balance of the price. Any agreement
(b) the goods also matched in kind, quality and character with that of to the contrary shall be void.
the sample or samples exhibited to the buyer or his representative
Article 1485. The preceding article shall be applied to contracts
Article 1482. Whenever earnest money is given in a contract of sale, it purporting to be leases of personal property with option to buy,
shall be considered as part of the price and as proof of the perfection when the lessor has deprived the lessee of the possession or
of the contract. enjoyment of the thing.
Article 1486. In the case referred to in the two preceding 3. Guardian—Property of Ward.
articles, a stipulation that the installments or rents paid shall not 4. Executors and administrators—Estate
be returned to the vendee or lessee shall be valid insofar as the 5. Justices, Judges, Prosecuting Attorneys, Clerks and employees of court
same may not be unconscionable under the circumstances. —Property/Rights under litigation.
6. Others disqualified by law. (Ex. *aliens who are disqualified to
Article 1487. The expenses for the execution and registration of the purchase private agricultural lands; *an unpaid seller having a right of
sale shall be borne by the vendor, unless there is a stipulation to the lien or having stopped the goods in transitu, who is prohibited from
contrary. buying the goods either directly or indirectly in the resale of the same at
a public or private sale w/c he may make. Art. 1533, par.5)
Article 1488. The expropriation of property for public use is governed
by special laws. Rationale: Fiduciary relationship
Status of Sale: Voidable (1-3); Void (4-6)
Article 1489. All persons who are authorized in this Code to
obligate themselves, may enter into a contract of sale, saving the Article 1492. The prohibitions in the two preceding articles are
modifications contained in the following articles. applicable to sales in legal redemption, compromises and
Where necessaries are those sold and delivered to a minor or other renunciations.
person without capacity to act, he must pay a reasonable price
therefor. Necessaries are those referred to in article 290. Article 1493. If at the time the contract of sale is perfected, the thing
which is the object of the contract has been entirely lost, the contract
Two Kinds of Incapacity: shall be without any effect.
1. Absolute Incapacity- Party cannot bind himself in any case.
2. Relative Incapacity- Certain Persons under certain circumstances But if the thing should have been lost in part only, the vendee may
cannot buy certain property. choose between withdrawing from the contract and demanding the
** Minors in contract for necessaries must pay reasonable price. remaining part, paying its price in proportion to the total sum agreed
upon.
Necessaries—those things which are needed for sustenance, dwelling,
clothing and medical attendance, in keeping with the financial capacity Partial Loss Rules:
of the family of the incapacitated person. 1. Vendee may withdraw from the contract
2. Demand the remaining part, paying its price in proportion to the
Article 1490. The husband and the wife cannot sell property to each total sum agreed upon
other, except:
(1) When a separation of property was agreed upon in the marriage Article 1494. Where the parties purport a sale of specific goods, and
settlements; or the goods without the knowledge of the seller have perished in part
(2) When there has been a judicial separation of property under article or have wholly or in a material part so deteriorated in quality as to be
191. substantially changed in character, the buyer may at his option treat
the sale:
Prohibition against Husband and Wife. Exceptions. (1) As avoided; or
Rationale: PID (2) As valid in all of the existing goods or in so much thereof as have
a. To avoid Prejudice to 3rd Persons not deteriorated, and as binding the buyer to pay the agreed price for
b. To prevent one spouse from unduly influencing the other. the goods in which the ownership will pass, if the sale was divisible.
c. To avoid by indirection the violation of the prohibition against
donations. Loss/Substantial Deterioration of Specific Goods without seller’s
knowledge.
Who may assail illegality? 1. Buyer may avoid the sale or
a. Creditors prior to the sale 2. May treat sale as valid w/ respect to the existing goods
b. Heirs of either spouse.
Article 1495. The vendor is bound to transfer the ownership of and
** Either spouse may not assail illegality because they are parties deliver, as well as warrant the thing which is the object of the sale.
thereto.
** A spouse designated as agent of the other spouse may sell the latter’s Obligations of Vendor. (TDWP)
exclusive property. 1. Transfer Ownership (not waivable)
2. Deliver (not waivable)
Article 1491. The following persons cannot acquire by purchase, even 3. Warrant Object (waivable and may be modified)
at a public or judicial auction, either in person or through the 4. Preserve Thing from perfection to delivery (Art. 1163)
mediation of another: 5. Pay for the execution and registration of the sale unless there is a
(1) The guardian, the property of the person or persons who contrary agreement
may be under his guardianship;
(2) Agents, the property whose administration or sale may have **Execution sales do not require the delivery of thing since a one year
been intrusted to them, unless the consent of the principal has period of redemption is available to seller.
been given;
(3) Executors and administrators, the property of the estate Article 1496. The ownership of the thing sold is acquired by the
under administration; vendee from the moment it is delivered to him in any of the ways
(4) Public officers and employees, the property of the State or of any specified in articles 1497 to 1501, or in any other manner signifying
subdivision thereof, or of any government-owned or controlled an agreement that the possession is transferred from the vendor to
corporation, or institution, the administration of which has been the vendee.
intrusted to them; this provision shall apply to judges and government
experts who, in any manner whatsoever, take part in the sale; Article 1497. The thing sold shall be understood as delivered,
(5) Justices, judges, prosecuting attorneys, clerks of superior and when it is placed in the control and possession of the vendee.
inferior courts, and other officers and employees connected
with the administration of justice, the property and rights in Control and Possession necessary in Delivery.
litigation or levied upon an execution before the court within Exception: Art. 1478. Stipulation as to full payment of price.
whose jurisdiction or territory they exercise their respective
functions; this prohibition includes the act of acquiring by Delivery- a mode of acquiring ownership as a consequence of a contract
assignment and shall apply to lawyers, with respect to the of sale by virtue of which actually or constructively the object is placed
property and rights which may be the object of any litigation in in the control and possession of the vendee.
which they may take part by virtue of their profession;
(6) Any others specially disqualified by law. KINDS OF DELIVERY
1. Actual or Real. (1497)
Persons Relatively Incapacitated to Buy. (PAGEJO) 2. Legal or Constructive
1. Public Officers and employees—Property Of State. a. Legal Formalities (1498); execution of public instrument.
2. Agents—Property of Principal unless with consent. b. Symbolical Tradition (1498 par 2)- keys delivered.
c. Traditio Longa Manu- by mere consent /agreement. If the Transaction on Approval or Trial/Satisfaction. Subject to Suspensive
movable sold cannot yet be transferred to the possession of the Condition.
buyer at the time of the sale. (1499) Rules:
d. Traditio Brevi Manu- if the buyer had already the possession the 1. Risk of loss to seller until the sale becomes absolute. (Exceptions:
object even before the purchase. (lessee becomes owner) Buyer in default; Buyer agreed to bear the loss)
e. Traditio constitutum possessorium- possession as owner 2. Buyer must give goods a trial except when it is evident that it cannot
changed. (Owner becomes lessee) perform the work intended.
3. Period of signifying acceptance commences to run only when all the
3. Quasi-Tradition- Delivery of Rights, credits or incorporeal property parts essential for operation has been delivered.
made by: 4. A provision that a 3 rd person must satisfy approval is valid but he must
a. Execution of public instrument be in Good faith.
b. Placing titles of ownership in the hands of a lawyer. 5. Generally the Sale and Delivery to an expert buyer is not a sale on
c. Allowing the buyer to make use of the rights (1501) approval/trial.
Article 1498. When the sale is made through a public instrument, Sale or Return vs. Sale on Approval
the execution thereof shall be equivalent to the delivery of the thing Basis Sale or Return Sale on Approval
which is the object of the contract, if from the deed the contrary
does not appear or cannot clearly be inferred. Condition Subject to Resolutory Subject to suspensive
condition condition
With regard to movable property, its delivery may also be made by
the delivery of the keys of the place or depository where it is stored Premise It depends upon the It depends upon the
or kept. will of the buyer suitability, quality or
character of the
Requirements:
1. Seller’s Control. goods
2. Seller’s Control transferred to buyer.
3. Intention to deliver for ownership. Transfer of ownership Ownership Ownership does not
immediately passes immediately pass to
Article 1499. The delivery of movable property may likewise be made to the buyer on the buyer. It passes
by the mere consent or agreement of the contracting parties, if the delivery only upon approval or
thing sold cannot be transferred to the possession of the vendee at the satisfaction of the
time of the sale, or if the latter already had it in his possession for any
buyer duly
other reason.
manifested after trial
Article 1500. There may also be tradition constitutum possessorium.
Revesting of Ownership is There is no revesting
Different forms of Constructive Delivery - Constructive delivery has ownership in the revested in the seller of ownership because
same legal effect as actual or physical delivery owner if the buyer so it is retained by the
decides seller until the sale
1. Traditio Longa Manu − Delivery of thing by mere agreement; when becomes absolute
SELLER points to the property without need of actually delivering
2. Traditio Brevi Manu − Before contract of sale, the would be buyer Risk of loss or The risk rests on the The risk remains in
was already in possession of the would be subject matter of sale (ex: as deterioration buyer before the the seller while the
lessee)
revestment of goods are on trial
3. Symbolic delivery − As to movables – ex: delivery of the keys to a car
4. Constitutum possessarium − When at the time of the perfection of ownership
the contract of sale, seller had possession of the subject matter in the
concept of owner and pursuant to the contract, seller continues to hold
physical possession no longer in the concept of an owner but as a lessee
or any other form of possession other than in the concept of owner.